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What is the National Institute of Finance? |
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The National Institute of Finance (NIF) is a proposed U.S. Government entity that would serve as a resource to gather and provide appropriate data for the financial regulatory community. The NIF would also provide the analytical capabilities to monitor systemic risk, perform independent risk assessments of individual financial entities, and provide advice to the Federal regulatory agencies tasked with ensuring the health of the financial system. |
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Last Updated on Tuesday, 03 November 2009 11:15 |
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What is the proposed legal status of the NIF? |
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The NIF would be an agency of the U.S. Federal Government organized within and under the authority of the proposed systemic risk regulator. |
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Last Updated on Thursday, 24 September 2009 21:39 |
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Is the NIF meant to replace the systemic risk regulator? |
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No. The core mission of the NIF will be to support the systemic risk regulator, by delivering a range of data management, analytic and research services. |
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Last Updated on Tuesday, 06 October 2009 17:09 |
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Would the NIF replace or supersede the government's current capabilities to collect and manage financial data, or would it supplement those capabilities? |
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The NIF would supplement and not supersede the government's existing capabilities, and would not affect the existing authority of regulatory agencies to collect and manage data. To support its mandate, the NIF would establish uniform data standards to assure the accuracy and comparability of the detailed financial data it collects. Financial regulatory agencies may benefit from the NIF's expertise and economies of scale by contracting with the NIF to handle data management tasks on their behalf. |
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Last Updated on Tuesday, 06 October 2009 17:30 |
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Does the proposed data collection authority represent a dramatic expansion of federal government power? |
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Access to data is an established regulator tool; financial regulators already have extensive authority to collect granular data from regulated entities under the existing “safety and soundness” provisions of the law. Core supervisory and regulatory tasks—including institutional risk monitoring, examination support and detection of insider-trading—already require the examination of position-level information. The NIF would standardize these data reporting requirements, and would extend them to cover the growing number of shadow bank and other financial entities that are systemically important. |
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Last Updated on Friday, 27 November 2009 07:17 |
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Why would the NIF need a strong analytic capacity? |
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An analytic capacity is required because data on its own does not constitute useful information. In order for the systemic regulator to be effective, the NIF will need to develop appropriate metrics, and monitor and report changes in system-wide risk levels and patterns. The analytic part of the NIF would also engage in fundamental research to support the systemic regulator. In addition, the NIF would provide analytic tools to regulators who oversee individual institutions. The analytic capacity of the NIF would provide essential tools to regulators so they would no longer need to outsource critical activities, such as running a stress test or determining the health of a financial institution. |
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Last Updated on Friday, 27 November 2009 08:32 |
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Are there any other government agencies that provide models for the NIF? |
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The core functions of the NIF will be to collect, manage and analyze data, monitor conditions in financial markets, and generate non-partisan, objective research. These roles make it broadly analogous to agencies such as the National Weather Service, the National Transportation Safety Board, and the National Labs run by the Department of Energy. |
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Last Updated on Tuesday, 20 October 2009 10:54 |
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Would the NIF be a clearinghouse for transactions? |
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No. The NIF would not be a clearinghouse for trades, nor would it assume the roles currently played by exchanges and clearinghouses. The NIF would not settle financial transactions. The NIF would not be a party to any trades. |
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Last Updated on Friday, 27 November 2009 07:17 |
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